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South Asia Investor Review is focused on reporting, analyzing and discussing the economy and the financial markets of countries in South Asia, including Pakistan, Bangladesh and Sri Lanka. For investors looking to invest in emerging markets beyond BRIC countries (Brazil, Russia, India and China), this blog is designed to help international investors looking to learn about investing in South Asia with focus on Pakistan. Riaz has another blog called Haq's Musings at http://www.riazhaq.com

Karachi's KSE-100 index surged nearly 50% (37% in US $ terms) in 2012 to top all Asian market indices. It was followed by Bangkok's SET index which advanced 36%. It also easily beat India's Sensex index which was the top performer among BRICs with 25.19% annual gain.

A string of strong earnings announcements by Karachi Stock Exchange
listed companies and the Central Bank's rate cuts helped the KSE-100 index approach 17,000 level, a gain of 49.84% (37% in US dollar terms). In spite of this run-up in KSE-100, Andrew Brudenell, manager of the HSBC Frontier
Markets fund (HSFAX) in London, remains bullish on Pakistani equities, according to Barron's. Pakistan is one of the cheapest
markets he follows, at about seven times earnings. He notes that
earnings growth has kept pace with the market. The firms, he adds, are
typically cash-rich, boast strong return on equity levels in the 20%
range, and pay good dividends.

Here's an excerpt of a recent Businessweek story titled "Pakistan, Land of Entrepreneurs " which captures the ground reality of Pakistan's business landscape that is masked by the continuing reports of doom and gloom making up the standard mass media narrative about Pakistan:

" (Arif) Habib, who started as a stockbroker more than four decades ago, has
expanded his Arif Habib Group into a 13-company business that has
invested $2 billion in financial services, cement, fertilizer, and steel
factories since 2004. His group and a clutch of others have become
conglomerates of a kind that went out of fashion in the West but seem
suited to the often chaotic conditions in Pakistan. Engro,
a maker of fertilizer, has moved into packaged foods and coal mining.
Billionaire Mian Muhammad Mansha, one of Pakistan’s richest men, is
importing 2,500 milk cows from Australia to start a dairy business after
running MCB Bank, Nishat Mills, and D.G. Khan Cement.

These
companies have prospered in a country that, since joining the U.S. in
the war on terror after Sept. 11, has lost more than 40,000 people to
retaliatory bombings by the Taliban. Political violence in Karachi has
killed 2,000 Pakistanis this year, and an energy crisis—power outages
last as long as 18 hours a day—has led to social unrest. Foreign direct
investment declined 24 percent to $244 million in the four months ended
Oct. 31, according to the central bank.

At the same time, some
70 million Pakistanis—40 percent of the population—have become
middle-class, says Sakib Sherani, chief executive of Macro Economic
Insights, a research firm in Islamabad. A boom in agriculture and
residential property, as well as jobs in hot sectors such as telecom and
media, have helped Pakistanis prosper. “Just go to the malls and see
the number of customers who are actually buying in upscale stores and
that shows you how robust the demand is,” says Azfer Naseem, head of
research for Elixir Securities in Karachi. “Despite the energy crisis,
we have growth of 3 percent.”

Sherani of Macro Economic Insights
estimates the middle class doubled in size between 2002 and 2012. “Those
who understand the difference between the perception of Pakistan and
the reality have made a killing,” Habib says. “Foreigners don’t come
here, so the field is wide open.” The KSE100, the benchmark index of the
Karachi Exchange, has risen elevenfold since mid-2001. Shares in the
index are up 43 percent this year alone. Over the past decade, stocks
have been buoyed by corporate earnings, which were bolstered in turn by
rising consumer spending."

While Pakistan's public finances remain shaky, it appears that the
country's economy is in fact healthier than what the official figures
show. It also seems that the national debt is much less of a problem
given the debt-to-GDP ratio of just 30% when the informal economy is fully comprehended. Even a small but serious effort to collect more taxes can
make a big dent in budget deficits. My hope is that increasing share of
the informal economy will become documented with the rising use
of technology. Bringing a small slice of it in the tax net will make a
significant positive difference for public finances in the coming years.

Comments

Here's Daily Times on inflation in Pakistan ad the rest of South Asia region:

ISLAMABAD: Despite experiencing inflationary pressure in the region, Pakistan has managed to contain inflation rate within single digit, which is lower than the regional countries including India and Sri Lanka.

Pakistan’s year on year inflation rate (Consumer Price Index) registered an increase of 7.9 percent in December 2012 as compared to same period of last year.

While in India the CPI was registered at 9.2 percent followed by Sri Lanka 9.2 percent and in Bangladesh the CPI increased by 7.2 percent (October 2012), the official sources said.

The price comparison of essential consumer items prevailing on December 27, 2012 in Pakistan as compared to neighboring countries including India, Bangladesh, Sri Lanka and Afghanistan are indicative as prices of wheat, wheat flour, rice, sugar and red chillies were found lower in Pakistan than other regional countries.

Currently the wheat flour is being sold at the rate of Rs 34.5 in Islamabad while its price in New Delhi(India), Dhaka (Bangladesh), Colombo (Sri Lanka) and Kabul (Afghanistan) is Rs 37.6, Rs 49.6, Rs 132.5 and Rs 54 per kilogramme (kg) respectively.

Similarly rice is being sold at Rs 114.1, Rs 163, Rs 188.8, Rs 132.5 and Rs 171 per kg in Islamabad, New Delhi, Dhaka, Colombo and Kabul respectively.

The prices of mutton and beef in Islamabad, New Delhi, Dhaka, Colombo and Kabul are Rs 565 and Rs 280, Rs 543 and Rs 273, Rs 531 and Rs 318, Rs 883 and Rs 412 and Rs 679 and Rs 540 respectively.

The sources added the petrol price in Pakistan was lower than in India and Bangladesh as the petrol was being sold at Rs 102.65, Rs 120.07 and Rs 108.85 respectively in Pakistan India and Bangladesh.

The price of diesel in Pakistan however is higher as compared to the regional countries. The diesel price is Rs 109.77, Rs 84.2 and Rs 74.61 in Pakistan, India and Bangladesh respectively.

According to the sources the government has constituted National Price Monitoring Committee under the chairmanship of secretary finance. The Committee is mandated to review the price and supply position of essential items in consultation with provincial governments and concerned federal ministries and divisions.

KARACHI: Despite of economic woes, heightened security environment and power crisis, Pakistan’s total return Karachi Stock Exchange (KSE-100) Index has been one of the best performing markets in the world with gain of 49 percent in local currency and 38 percent in US dollar in 2012.

Pakistan ranked amongst top 10 in the world due to 450bps decline in policy rate in last 18-months that besides boosting earnings, encouraged funds flows from government securities to equities. Resolution of Capital Gain Tax issues, improved relationship with US, better foreign flows and serenity on the political canvas were amongst other factors that created positive sentiments in the market

The Karachi stock market registered return of 49 percent compares favourably with last 10-years and 20-years average annual return of 28 percent and 22 percent respectively. Overall average daily volumes improved to 173 million shares during 2012 as compared to 79 million shares in 2011, while in value terms they stood at Rs 4.7 billion or $50 million as against Rs 3.5 billion or $40 million in 2011. However it compares unfavourably with last 10-year average daily volume of 220 million shares (Rs 16 billion or $237 million).

The reforms in Capital Gain Tax was given impetus to the market has come from substantial reduction in the interest rate in last 18-months. Since July 2011 policy markers had reduce the discount rate by 450bps to 6.5-years low to 9.5 percent amid considerable reduction in the inflation numbers (November CPI 6.9% is record low) that allowed them to focus on revival of growth. This not only improved the operating dynamics of leverage companies namely cement and textile, but has also accommodated funds flows from debt securities to stock market.

The foreign investors holds $3.1 billion worth of Pakistan shares which is 30 percent of free-float (7 percent of market capitalisation), remained net buyers in 2012, despite perception of heightened security concerns and structural issues. The foreigners in 2012 bought shares worth $933 million and sold $808 million resulting in net buying of $125 million ($194 million excluding Hubco). Though the number is a considerable improved from last year net sell of $127 million...

Here's Daily Times on decline in Pak defense budget and debt service since 1990s:

* Defence expenditures fall from 5.6% of GDP in 1994-95 to 2.5% in 2011-12, while debt servicing expenditures slump from 7.6% of GDP in 1997-98 to 4.3% in 2011-12

Staff Report

ISLAMABAD: Defence and debt servicing expenditures have been on the decline over the last nearly two decades in relation to gross domestic product (GDP), as spending on defence decreased from 5.6 percent in 1994-95 to 2.5 percent in 2011-12 while debt servicing which was 7.6 percent in 1997-98, is at a moderate level of 4.3 percent in 2011-12.

According to a report of Ministry of Finance’s Debt Coordination Office director general, the falling tax-to-GDP ratio has been a consistent problem over the decades. Even in the years of fiscal deficit contraction, the tax-to-GDP continued to fall. The decline is attributed to rising GDP in recent years but tax revenue failed to keep pace with the GDP growth. Hence, the improved fiscal discipline period has also been resultant of a controlled expenditure rather than expansion of revenues.

The policy decision to allocate 3.0 percent of the GDP to defence expenditures has not been done for the last couple of years due to financial constraints.

Fiscal balance has been under pressure for the last few years on back of structural deficiencies in tax system coupled with increasing expenditure on the back of high cost of subsidies. Broadening the tax net, enhancing the tax compliance, improving the service delivery, minimising the untargeted subsidies and result-based management of development expenditure are essential to attain fiscal discipline.

In May 1998, Pakistan went public with its nuclear capabilities, it is estimated that around Rs 100 billion were invested in Defence Saving Certificates (DSCs) by the public during 1997-98 and 1998-99. DCSs are 10 years instrument and both profit and principal are paid at the time of maturity. As the government follows cash accounting and no accrual is passed during the period, it results in understatement of fiscal deficits in initial years and overstatement of fiscal deficit in which the maturity of these certificates falls. The government paid around Rs 425 billion as interest on these DCSs during 2008-09 and 2009-10.

The total amount of food and energy subsidies paid between 2001-02 to 2007-08 stood at Rs 742 billion, whereas, Rs 1,407 billion was paid during last four years, which includes Rs 511 billion related to past year’s unpaid subsidies against power sector and commodity operations. The government didn’t increase the electricity tariff substantively during 2003 to 2008 that created circular debt in power sector companies. In 2010-11 and 2011-12, the government cleared the unpaid subsidy claims of Pakistan Electric Power Company related to past years amounting to Rs 433 billion (Rs 120 billion in 2010-11 and Rs 313 billion in 2011-12). Furthermore, past years’ subsidy claims of Rs 78 billion related to commodity operations were also paid during 2011-12. Higher international oil and commodity prices forced the government to intervene by providing higher energy and food subsidies to protect the vulnerable segments of the society and contain inflation.

Domestic loans: Pakistan’s domestic debt comprises permanent debt (medium and long-term), floating debt (short-term) and unfunded debt [made up of the various instruments available under the National Savings Scheme (NSS)] having shares of 22 percent, 54 percent and 24 percent, respectively in total domestic debt as on June 30, 2012.

The Governor, State Bank of Pakistan (SBP), Yaseen Anwar, has outlined the Central Bank's 10-point banking strategy for the growth of the financial system in the country.

This strategy focuses on implementing a financial inclusion programme for underserved economic sectors of the country, to strengthen consumer protection through legislation and codes of conduct and strengthen competition and efficiency with greater transparency as well as to consolidate the banking sector's corporate governance and risk management practices.

-----------

He said the State Bank's constant monitoring of the banking sector's portfolio has meant that today our banks are profitable, extremely healthy and robust. --------

Yaseen Anwar said the World Bank, and renowned publications, the Financial Times and The Economist, have recognized the State Bank's role in promoting innovative solutions, especially in microfinance, to get more people into the banking sector.

SBP Governor said the State Bank regulates the economy as a whole by using monetary policy instruments, which are transmitted through the financial sector.

`The potency of our monetary policy instruments depends on how many people are actively using formal channels of borrowing and lending', he added.

The SBP chief said the State Bank's monetary policy tools have become much more potent since the introduction of secondary markets that trade government securities, and the removal of distortions from within these markets.

Explaining as to how monetary policy works in Pakistan, Yaseen Anwar said that monetary policy tools target the interest rate.

`It's important to understand just how they do that. Different central banks use different tactics, but at the State Bank, we intervene primarily in the overnight interbank market.

This is the market where interest rates on loans that banks make to each other for a day. The central bank itself is a player in this market and steps in to either provide funds in times of need or drain money in times of excess. By doing that it manages the overnight rate to keep it within a certain band.

The monetary policy rate that is announced in the press indicates the ceiling of this band. The overnight rate is linked to all other interest rates in the market. By changing the ceiling of the band, which the overnight rate fluctuates in, the central bank is able to influence interest rates', he added.

The SBP Governor pointed out Pakistan has never undergone a bout of hyperinflation but the past few years have seen higher than average inflation, the effects of which every individual has felt.

Inflation has reduced markedly in the past few months, he said and added: `It was because of this that the Bank decided to reduce its interest rate as well. The benchmark rate now stands at 9.5 percent.

We also expect that average inflation for the year will remain below 9.5 percent. A part of the reduction in inflation may be attributed to State Bank's active monetary management policies'.

He said the State Bank also ensures that the money market is never short of, or in excess of funds, and this means that monetary policy signals are transmitted efficiently.

He recalled: `Our equity market has been a consistent feature in Asia's best performing stock markets. Since we established a secondary market that can buy and sell government debt, our financial markets have become a lot more agile and responsive to policy changes. That's actually been one of the most important outcomes of the financial sector's reformation'.

Despite a disappointing 2011, many commodities rebounded in a year that was tough for all asset classes. Among agricultural products, wheat and soybeans yielded the highest gains and coffee the biggest loss while in metals, gold's rally stretched to a 12th year whereas oil posted its first annual loss since 2008 as commodities ended 2012 focused on the U.S. fiscal crisis after riding through a blistering drought and Europe's debt debacle.

Stocks showed best performance in three years after posting the worst returns in 2011, beating bonds, commodities and the dollar. The major force behind stocks is central banks. The MSCI All-Country World Index of equities increased 16.9 percent in 2012. The Standard & Poor’s GSCI Total Return Index of 24 commodities rose 0.1 percent, while the U.S. Dollar Index (DXY) lost 0.5 percent. Bonds of all types returned 5.73 percent, on average, according to Bank of America Merrill Lynch’s Global Broad Market Index.

Muddassar Malik, chief executive officer of BMA Funds, who oversees the equivalent of $120 million in stocks and bonds, comments on his outlook for Pakistan’s stock market after the benchmark Karachi Stock Exchange 100 index sank 3.2 percent to 16,107.89 yesterday, its steepest drop since Aug. 9, 2011.

Stocks fell after the country’s Supreme Court ordered the arrest of Prime Minister Raja Pervez Ashraf in a corruption case involving rental power projects. Prior to that announcement, Tahir-ul-Qadri, a popular cleric, rallied thousands of protesters in the capital Islamabad, calling for the government to be dismissed. Malik spoke in a phone interview from London late yesterday.

On the impact of the court order:

“The events are very significant, disruptive events for Pakistan’s political landscape. But I feel this is not the end, perhaps it’s the beginning. I believe the likelihood is that these events will be driving the position into positive territory.

“The structural and the fundamental story in Pakistan remains unimpaired; high population, a country with significant demand driven by domestic consumers and located in one of the fastest growing regions in the world. What is missing is a set of economic and political policies which create the right environment for investment and I think the disruption can bring about that change in confidence. There is a certain degree of optimism that we have to look forward to.”

On investors’ fears:

“There are concerns about the future direction post- elections. Investors are looking for clarity. In the last four or five years, Pakistan has been through a very difficult and challenging period in terms of politics and economics as well as the war on terror. So investors see a landscape that is starving of investment, and I think people are hungry to get back into the game.”

On market sentiment:

“The unexpected announcement was obviously a jolt for the market and it caught the market unaware and wrong-footed in the context of the political demonstrations taking place in Islamabad. Market sentiment is 100 percent driven by politics at the moment and I think it’s unrealistic to assume that sentiment will change very quickly for the next week to fortnight.”

On BMA Fund’s index target for 2013:

“Our index target for the calendar year 2013 is 20,000, and we don’t feel that the current set of events will derail that target for the time being. With the market showing the declines it has done and also the declines it could do in the coming days, it will certainly set up some of the good high- quality stocks to give healthy returns in excess to 20 percent to 30 percent.”

Pakistan was part of the Emerging Markets Index for 15 years, but MSCI dropped the country in December 2008. According to Askari, MSCI did not remove Pakistan because of any quantitative changes: rather, this was done solely because of the imposition of the floor rule by KSE authorities that year, which shut the stock market for over three months in August 2008.

“We should keep in mind that the Czech Republic and Peru have three companies each, while Hungary and Morocco have four companies each which meet the requirements of the MSCI Emerging Markets Index,” Askari said, emphasising the fact that in terms of the number of eligible companies, Pakistan is ahead of these four countries.

“They have not given us any logical reason yet. They keep saying we’re reviewing your case, but there hasn’t been any definite answer. Their reluctance is a mystery to me,” Askari added.

The MSCI communications team did not respond to repeated queries from The Express Tribune.

According to the MSCI Global Investable Market Indices Methodology issued in March 2011, a country must have at least three companies with full market capitalisation of $876 million, float market capitalisation of $438 million and 15% Annualised Traded Value Ratio – a liquidity measure – to become part of the MSCI Emerging Markets Index. Five Pakistani companies currently fulfil these requirements.

As for MSCI’s market accessibility criteria, capital market regulations in Pakistan do not discriminate between local and foreign investors, as the latter have no special registration and/or licencing requirement. Similarly, foreign investors may acquire up to 100% shares in a listed company through the secondary market.

As for the ease of capital inflows/outflows, which is another criterion for a country’s inclusion into the MSCI Emerging Markets Index, the regulatory framework in Pakistan allows foreign investors to trade freely in equities and debt instruments, he said. There are no restrictions on foreign investors taking their capital out of the country, he pointed out.

“The Securities and Exchange Commission of Pakistan has implemented necessary measures to ensure that market discipline and integrity are not compromised in the future by ad hoc decision-making, such as floor rules, by the country’s stock exchanges,” Askari added.

While mentioning that the returns on the KSE-100 index were 49.3% in rupee terms and 37% in dollar terms in 2012, Askari said MSCI must review its decision to keep Pakistan out of its Emerging Markets Index.

“Investors are confident that the earning season will be pretty good this quarter,” Khurram Schehzad, head of research at Arif Habib Ltd., said by phone.

Arif Habib, a Karachi-based brokerage, forecasts overall earnings to rise as much as 15 percent in the three months to Dec. 31 from a year earlier, he said. The KSE 100 trades for 6.9 times estimates for this year’s profit, the lowest among 15 Asia-Pacific benchmark indexes tracked by Bloomberg.

The KSE 100 tumbled 3.2 percent on Jan. 15, the biggest drop since August 2011, after the nation’s Supreme Court ordered the arrest of Prime Minister Raja Pervez Ashraf. The gauge has climbed 4.9 percent since then, after the chairman of the anti- corruption agency told the chief justice Jan. 17 there isn’t enough evidence to arrest the prime minister and others accused of graft in awarding power contracts.

Figures released by the National Clearing Company of Pakistan showed that mutual funds were major buyers with net purchases worth $6.03 million. Foreign investors sold equity in the net sum of $0.76 million.

Turnover galloped to 271 million shares on Thursday, against 218 million shares traded the earlier day with the trading value increasing to Rs6.9 billion, from Rs5.5 billion.

Market capitalisation was up to Rs4.263 trillion, from Rs4.223 trillion.

In all, 353 stocks came up for trading with 205 gainers; 123 losers and 25 ending at the previous values.

Equity dealer, Samar Iqbal at Topline Securities observed that the Karachi bourse managed to close above psychological mark of 17,000.

Institutional buying and good corporate results helped equity prices to improve by approximately one per cent.

More than expected earnings announcement by Engro Foods helped the market sentiment.

Mid cap cement stocks performed well as investors expecting healthy profits for the quarter ending December.

Ahsan Mehanti at Arif Habib Corp stated that the stocks had closed at record high amid rising trades in the earnings announcements session at KSE after SBP slashed yield on T-bills.

Other reasons listed for the bullish trend at the market were investor hopes for policy rate cut in monetary announcement due next month, rising local cement prices, easing political uncertainty and renewed foreign interest in Pakistani equities.

Hasnain Asghar Ali at Escorts Capital commented that fresh inflows in E&P stocks took along the benchmark for yet another historic session.

The heavy weight E&P stocks led the bullish run and were well supported by the cement and textiles. Also better than expected earnings of EFood invited renewed buying interest as the company reported record growth in earnings.

The news flows regarding Secondary Public Offering of PPL, settlement of property dispute with Etisalaat and issuance of 3G license stayed the driving factor for the local equities.

Judicial hearings, law and order concerns and volatility on political front continued to suggest caution.

On Thursday’s trading, Unilever Food posted the highest gain for the day, in the sum of Rs105 to Rs3905 and was followed by Bata (Pak) which rose by Rs41.05 to Rs1355.

On the other side, UniLever Pak posted the heaviest loss of Rs35.16 to Rs9914.83 and Sanofi-Aventis Pak declined by Rs9 to Rs316.

The 10-top active list was again dominated by the sideboard items. Fauji Cement rose by 32 paisa to Rs7.80 on a huge volume of 60m shares.

It was followed by Maple Leaf Cement, which hit the ‘upper circuit’ with a gain of Re1 to end at Rs17.86 on 23m shares.

Byco Petroleum added 45 paisa to close at Rs14.37 on 20m shares; Jah.Sidd.Co was up by19 paisa to s16.53 on 14m shares; Fatima Fertilizer Company edged higher by 8 paisa to Rs25.88 on13m shares; PTCL was up by 46 paisa to Rs17.82 on12m shares; Lafarge Pakistan was firm by 16 paisa to Rs5.46 on 8m shares; Engro Foods, which declared financial figures on Thursday, was greeted warmly by investors with the price of stock jumping by Rs3.83 to Rs100.82.

TRG was the only scrip among the volume leaders which shed 7 paisa to s7.01 on 6m shares and KESC added 19 paisa to its overnight value and closed at Rs5.84 on 6m shares.

On my way from Pakistan to Washington, I had a chance meeting with a Pakistani economist of considerable repute. We met at Karachi airport’s departure lounge. I have known him for years and have highly valued his work on the Pakistani economy. He surprised me by suggesting that the country was in a much better shape than suggested by some of my writings and those of several others who thought like me. He was of the view that the situation did not warrant the kind of pessimism reflected in our assessments. “Macro numbers may look bad but the real economy is doing reasonably well — in fact very well”, he said. ...-----------He told me of a recent visit he and some other economists had taken to Faisalabad — arguably the hub of Punjab’s industrial economy — and came across extraordinary enthusiasm about the future of the country and its economy. “The industrialists and traders we met at the city’s Chamber of Commerce were looking forward to the opening of the economy with India. There was nothing but good in that for them and the country”. But it was not only the entrepreneurs operating in large urban centres of the country that look upon Pakistan’s economic future with hope. “The countryside was booming with consumer durables being sold at rates never seen before”, said my economist friend. “I have traveled up and down the country in recent months and seen with my own eyes what numbers don’t tell. The recent commodity boom in the international market place has done wonders for the Pakistani producers in the countryside and also for rural consumers. There is palpable prosperity in the country’s towns and villages”.----------For the last five years, Pakistan has had a representative form of government but the representatives people have sent to the various legislative assembles have served mostly vested interests. Would that change? The tens of thousands of people who followed the preacher-politician Tahirul Qadri to Islamabad did so in the hope of widening the system by including those who are prepared to work for others.

Around 370 million shares were traded, mostly in telecoms companies. Both Pakistan Telecommunication Corporation and Engro Corporation closed at their upper limit.

Their stocks were boosted by news that the courts had approved a rise in international call rates and that the Engro would receive a steady gas supply. Pakistan suffers from chronic gas and electricity shortages.

Some correction was witnessed in oil stocks due to falling international oil prices, said equity dealer Samar Iqbal at Topline Securities.

MUMBAI: The BSE Sensex fell for a second session on Friday to its lowest close in two months, led by declines in HDFC after Goldman Sachs downgraded the stock to “sell”, while ITC fell on fears of a hike in excise duty for tobacco in the upcoming budget.

Shares are expected to be range-bound ahead of the 2013-14 budget, to be unveiled on February 28, and investors will watch whether the finance minister will manage to impose fiscal discipline even as the government tries to revive growth.

India has targeted a fiscal deficit of 4.8 percent of gross domestic product for the year starting in April, but budget details will also be key given an austerity push could add to inflationary pressures, hampering chances for rapid interest rate cuts.

Global risk factors will also be key given domestic shares on Thursday posted their biggest fall since July on worries about whether the US Federal Reserve will continue its bond buying programme.

Announcements have to turn into action otherwise global risk aversion might lead to redemptions even at FII desks, Kedia added.

The benchmark BSE Sensex fell 0.04 percent, or 8.35 points, to end at 19,317.01, after falling 0.77 percent for the week, marking a fourth week of falls.

The broader Nifty fell 0.03 percent, or 1.95 points, to end at 5,850.30, also ending 0.63 percent lower for the week.

Housing Development Finance Corp Ltd (HDFC.NS) fell 1.9 percent, its biggest single day fall since January 11, after Goldman Sachs cut its rating on to “sell” from “neutral”, on expectations that Asia’s third-largest economy would recover at a “modest” pace and the prospect of rising competition.

ITC Ltd (ITC.NS) fell 1.6 percent, marking a third day of losses, on continued fears of a hike in excise duty in the upcoming budget, as the government aims to increase its tax collections to offset some of its revenue shortfall.

Jet Airways (JET.NS) fell 5.7 percent on continued concerns about whether the carrier will clinch a stake sale to Abu Dhabi-based carrier Etihad Airways. Shares have fallen 14.5 percent for the week - their biggest weekly loss since August 28, 2012.

Naveed Vakil, director, research and business development, AKD Securities:

Oil and Gas Development Company Limited (OGDCL): Dollar-based returns and a firm oil price outlook should keep returns high, especially as key development projects come online and the monetisation of recent finds is fast-tracked.

Pakistan Oil Fields (POL): [Its performance is closely linked] to international oil prices that are likely to remain firm in the near term as demand growth recovers, especially from China. POL also offers exposure to Pakistan’s Kohat Basin which is where there has recently been a string of discoveries have been high impact.

Pakistan Telecommunication Company Limited (PTCL): PTCL should post strong earnings growth this year, due to higher margins following the implementation of higher international incoming call rates. Infrastructure is being installed to curtail grey incoming international traffic, which should support legitimate volume as well.

Lucky Cement: Pakistan’s largest cement company should continue benefitting from a rise in domestic consumption led by development spending ahead of the elections. It should benefit from high margins as domestic cement prices remain firm while coal costs remain low.

Furqan Punjani, deputy head of equity research at BMA Capital Management Limited:

Oil and gas

Robust oil prices coupled with [increasing production volumes should] keep the oil and gas exploration and production sector in the limelight in next few years. Revenue streams linked to the dollar and local currency depreciation would also help augment bottom-lines in the sector. We prefer Pakistan Oilfields and Pakistan Petroleum because of their better dividend yields.

Textiles

Based on better exports prospects and higher profit margins (on low cost cotton) as well as a promotion in the gas allocation list by the government, the textile sector has made it onto our list of top investment ideas for 2013. Nishat Mills is the biggest integrated textile unit in Pakistan and will continue to benefit from its well-diversified core operations and the good potential of its portfolio holdings.

Fertilizer

We believe the fertilizer sector presents an ideal mix of defensive and high-growth plays for 2013. Our top pick in the sector is ENGRO.

Cement

Cement prices are currently at an all-time high of Rs440(Dh16.27) a bag. We like companies that can magnify top line growth into the bottom-line, thanks to the deleveraging of their balance sheet. This makes DGKC.PA our top pick in the sector.

Energy

Pakistan is an energy deficit country and the entire production of independent power producers (IPPs) is consumed on any given day. Moreover, with higher and regular subsidies from the government translating into better cash inflows, the sector has once again come into limelight. Furthermore, as revenues and profits are linked to the dollar, the depreciating Pakistani rupee will also benefit this sector. We prefer Hub Power Company, the largest private sector power producer of Pakistan, because of its higher dividend yields and stable bottom-line.

Commercial banks

The Central bank of Pakistan has reduced the base [interest] rate by 450 basis points in the last 24 months. This has reduced the net interest margins of the entire banking sector, barring a few large banks that have the ability to reduce the rates provided to their depositors and keep attracting fresh deposits at lower rates. United Bank Limited is one of them. We prefer UBL [because] of their ability to grow their deposits by double digits at lower cost, coupled with their greater exposure to high yielding long term government bonds. Furthermore their quarterly payout will continue to lure value investors to the bank. ....

KARACHI: The sales pitch employed by Elixir Securities CEO Junaid Iqbal to global fund managers at the Pakistan Capital Markets Day in New York last month was simple: even if the incumbent government returns to power after the upcoming elections, the Karachi Stock Exchange (KSE)-100 Index is still likely to post returns of over 21% in 2013.

In case a more pro-business government – supposedly led by the PML-N – comes into power, the stock market will rerate from the current multiple of 6.9 to 7.9, if the projections of the Elixir Securities research team are to be believed. That would push the index to 23,200 points by the end of 2013, which translates into an annual return of 38%.

In the best-case scenario, wherein the new political leadership tries to fix the taxation system in its first months in power, Elixir Securities estimates the KSE-100 Index will likely touch 26,000 points by December 2013, which means a staggering 54.8% annual return.

“The market is operating at an average multiple. In the absence of any leverage, there are no associated risks. It is being driven purely by earnings growth right now,” Iqbal told The Express Tribune in an interview.

Initially planned as a one-day event (hence named the Pakistan Capital Markets Day), Elixir Securities’ two-day road show in the global financial centre was attended by 35 fund managers, partners and principals from 25 major international asset management companies and hedge funds. Elixir Securities also took along representatives from Engro Corporation, Engro Foods, Lucky Cement and United Bank Limited. Iqbal was accompanied by the heads of his research and sales departments.

“All of them wondered how Pakistan’s capital markets could perform so well amidst bombings and violence,” he said, while noting that the KSE remained the third best-performing stock exchange of the world in 2012 by posting 37% returns in dollar terms, despite political instability and frequent terrorist attacks.

“I told them, honestly, that we cannot defend Pakistan on its human rights record: but the fact remains that the annualised growth in profits of the corporate sector for the last four years has been 17%,” he said.

“They understand that a political metamorphosis is taking place in Pakistan. At the same time, they are supremely impressed by the quality of management in our corporate sector,” he added.

Without naming the funds or giving their exact number, Iqbal said many of the companies he interacted with in New York have already consented to visit Pakistan in the near future. He said that it is not possible to state the exact amount of foreign institutional portfolio investment that is likely to come in as a result of his road show, but added that he was confident that investment will soon be coming into Pakistan’s capital markets.

He cited two reasons: firstly, all of the participants, which included some of the largest global funds, had sent their senior team members – something that shows how seriously they viewed Pakistan’s financial sector. Secondly, he noted, they were all ‘knowledgeable investors’ who had already developed deep understanding of issues ranging from the suspension of gas to Engro’s $1.1 billion fertiliser plant, to turf wars in Karachi involving the People’s Aman Committee.

“Pakistan is already on their radar. Our market will skyrocket once the law and order situation improves,” he said.

Forget the BRICs; Zambia, Estonia and Pakistan are the place for alpha investors, argues former Golaman Dachs executive Dambisa Moyo in a piece on Quartz.com :

The search for superior, uncorrelated risk-adjusted returns continues, and savvy investors such as endowments and family foundations are turning their attention to the frontier markets. Such markets exclude the BRICs, many of which posted sizable equity returns of over 30% last year, including Nigeria, Estonia, Pakistan, and Kenya. The MSCI Africa sub index posted one-year returns of over 60%. By comparison, the BRICs (Brazil, Russia, India and China) grew slower and sluggish—for example, around 4% on the Shanghai index and -2% on Brazil’s Bovespa.

A set of well-known factors bind these seemingly random countries. Solid debt and deficit dynamics; attractive labor trends, favorable demographics and upward mobility; and important productivity gains all make for a compelling economic growth story. However, there are two areas where perceptions of frontier economies are really changing: risk and liquidity.

In regards to risk, investors are beginning to better understand the significant benefits of delineating between risk, measurable and possible to calculate, and uncertainty, which is not. Like anywhere else, investors who can tap into on-the-ground networks and relationships have an advantage with risk management. But thankfully meaningful, the task of risk assessment has gotten easier with increases in transparency around economic and political information, data flows and widely available regulations over jurisdictions. The transition to western-styled democracy and fully transparent and liquid capital markets will be bumpy, but the uncertainty arising from these growing pains should be viewed in the context of an upwardly sloping trend line of progress which will almost certainly occur over a relatively short time line.

Correlations between frontier and developed stock market returns are around 0.75, compared to roughly 0.90 between developed and emerging economies such as the BRICs. Country risk premiums are close to those of the broader emerging markets. With proper risk management tools, this implies that investors can garner significant diversification benefits. The lower correlation between frontier and developed markets points to risk factors that are orthogonal to the global risk-on, risk-off theme that has captivated markets over the past five years. Frontier markets provide opportunities to step away from the global macroeconomic themes and focus on the micro stories on the ground, thus providing a better environment to identify unique investment opportunities. Smart investors are looking for great opportunities that are driven by company-specific issues from which they can analyze and profit.

In terms of liquidity, both equity and debt markets – international and local – have grown considerably over the last five years. Today, with a market cap of more than $1 trillion, the universe of stock markets boasts more than 8,000 listings across broad sectors with notable risk/reward profiles in financials such as banking and insurance, consumer goods, and telecommunications companies. A number of commentators erroneously believe investing in frontier markets is simply expressing a commodity trade. To assume this would be miss out on some of the more significant opportunities in these burgeoning markets such as in the logistics and telecommunication sectors. Moreover, to put a finer point on this, today Africa has almost 20 stock exchanges, with just over a thousand listed equities; more than 85% of these stocks are non-commodity related businesses....

KARACHI - Hopes for change in the political setup along with strong foreign inflows were the major drivers of the country’s equity market during the first quarter of calendar year 2013 (1Q2013).The market observers believe that while the May 11 election are around the corner, the equity investors were cautiously looking at the fast-changing political developments in the country. “We anticipate market activity to hinge on political temperature of the country,” viewed Topline analyst Nauman Khan.The heightened investors’ confidence was also attributed to significant reduction in the policy rate that had facilitated the funds flows towards equity market, said the analysts.The benchmark KSE 100-share index posted a gain of 6 percent, 5 percent in dollar terms, during the quarter to close at 18,043 and overall market capitalization reached Rs4.4 trillion or $45.2 billion.“Though the index made a new high of 18,185, on March 01, 2013, the market capitalization was still seven percent, 40 percent in dollar terms, down from its record high of Rs 4.8 trillion ($74.9 billion) achieved on April 18, 2008,” said Khan.With index achieving our midyear target of 18,000, we re-iterate that index can make a new high by crossing 19,500 in calendar year 2013 as mentioned in our strategy note date December 12, 2012. Abrupt PKR deprecation due to weakness in external account remains the major risk to our assessment.The positive momentum was accompanied by higher traded volumes. During 1Q2013, average daily traded volumes stood at Rs5.7 billion (US$58.4 million) which compares favorably with Rs4.5 billion (US$46.6 million) recorded in the previous quarter. The average traded volumes are the highest in last 12-quarters.In terms of shares, average volume stood at 210.6 million which is up 25 percent from preceding quarter, while are highest since 1Q2008 (19-quarters high).In addition to higher foreign buying, we believe increased participation by individual investors have also contributed to improved depth of the market. Individual participation on an average improved to 50 percent in 1Q2013 as against 48 percent in the preceding quarter.The foreigners, that hold $3.3 billion worth of Pakistan shares that is 31 percent of free-float and 8 percent of market capital, remained net buyers in 1Q2013.The offshore investors in the quarter bought shares worth $228 million and sold $158 million resulting in net buying of $70 million as of March 28.The numbers compare favorably with $65 million net inflow registered in previous quarter.Giving their future outlook, the analysts reiterated that the market participants were likely to cheer signs of change in the political setup. “Mid caps with high leverage and consumer related business can perform better than large caps in 2013,” said Khan.

KARACHI: The Karachi stock market crossed 18,900 points level on the last trading day of the week Friday as earnings frenzy continued to encourage investors to go for buying in oil, fertilizer and cement sectors.

The Karachi Stock Exchange (KSE) 100-share index gained 32.10 points or 0.17 percent to close at 18,917.71 points as compared to 18,885.61 points of the previous session. The KSE 30-share index was up by 10.81 points to close at 14,584.18 points as compared with 14,573.37 points.

“Mixed activity was seen at the market with corporate results season almost coming to an end,” said Topline Sec dealer Samar Iqbal. “Mixed March quarter results were announced today.”

Once again TRG came in the limelight as it closed at its upper cap with 27.5 million shares, she said and added that Engro Corporation and Foods saw some profit-taking ahead of the weekend.

The market turnover went down by 3.53 percent and traded 206.02 million shares as against 213.57 million shares of the previous session. The overall market capitalisation rose 0.34 percent and traded Rs 4.649 trillion as against Rs 4.633 trillion. Gainers outnumbered losers 204 to 146, while 17 stocks were unchanged.

“Stocks closed higher led by second-tier stocks on strong valuations,” said Arif Habib Corporation Director Ahsan Mehanti. “Index remained in a narrow range amid concerns over security unrest in the city, economic uncertainty and rupee fall despite recovery in global commodities and record quarter-end earnings announcements in oil, fertilizer, textile and cement stocks.”

The KMI 30-share index gained 36.24 points to close at 32,930.01 points from its opening at 32,893.77 points. The KSE all-share index closed with a gain of 48.06 points to 13,455.50 points as compared to 13,407.44 points of the previous session.

“The market closed in the green zone with intraday gains clipped by selling pressure in Engro Chemicals and Pakistan Petroleum,” said JS Research analyst Ovais Ahsan. “The banking sector gained led by MCB Bank and UBL as the sector continued to limp out of a long spell of underperformance.”

“Bulls reined the final session of the week as index came close to 19,000 points level during intraday trade,” said Habib Metropolitan Finance Corporation Salman Vidhani. “Selling pressure in Engro dampened overall sentiment as some stocks also registered a negative close.”

TRG Pakistan Ltd was the volume leader in the share market with 27.54 million shares as it closed at Rs 11.30 after opening at Rs 10.30, gaining Re 1. Lotte Chemical traded 16.43 million shares as it closed at Rs 7.54 from its opening at Rs 7.35, rising 19 paisas. Maple Leaf Cement traded 11.81 million shares and closed at Rs 18.95 as compared to its opening at Rs 19.36, shedding 41 paisas. Pervaiz Ahmad traded 11.50 million shares as it closed at Rs 3.29 as against its opening at Rs 2.57, increasing 72 paisas.

Pakistan’s stocks climbed the most in two months to a record as unofficial election results showed a party led by former Prime Minister Nawaz Sharif winning the most seats in parliament.The benchmark KSE 100 Index gained 1.8 percent, the most since March 12, to 20,272.28 as of 2:10 p.m. Karachi time, taking its rally this year to 20 percent. Sharif’s Pakistan Muslim League will probably lead a government that will support the nation’s business community, said Farrukh Hussain, who oversees about $110 million as chief investment officer at BMA Asset Management Co.Sharif, who served two terms as Pakistan’s prime minister in the 1990s, will face the challenge of bolstering an economy hampered by a power crisis and quelling a Taliban-led insurgency that has killed 151 people leading up to the elections. The KSE 100 rallied 8.5 percent in February 1997 when Sharif won his second term. The gauge could rise between 3 percent and 5 percent this week, and 15 percent by the end of the year, BMA Asset’s Hussain said.“With a Nawaz Sharif-led government, we can see a lot of support for the economy,” Hussain said by phone from Karachi yesterday. “Investors would feel much more comfortable with the incoming government.” BMA Asset’s Pakistan Opportunities Fund has beaten 98 percent of its peers this year, data compiled by Bloomberg show.Sharif’s party had won 127 seats in the lower house of parliament, according to a tally by state-run Pakistan Television. President Asif Ali Zardari’s Pakistan Peoples Party, which headed the previous administration, took 31 seats, a third of its previous total.Slowing GrowthThe results set the stage for the longer-term stability of the country’s sovereign rating of B minus, Standard & Poor’s Ratings Services said in a statement from Singapore today. That’s six levels below investment grade.Sharif, whose family owns steel and sugar mills, ended state monopolies in shipping, airlines and telecommunications when in office. Pakistan’s $210 billion economy grew an average 3.8 percent each year during Sharif’s terms as prime minister, according to data on the World Bank’s website. Under Zardari’s five-year administration, growth slowed to an average 3 percent, less than half the annual pace of the previous five years.The KSE 100 Index (KSE100) surged this year as higher commodity prices and consumer spending boosted earnings of the gauge’s companies by 43 percent in the past 12 months, the most among 17 Asian equity indexes, data compiled by Bloomberg showed as of May 9. That profit growth lured $202 million of stock purchases from overseas investors this year, the most since the same period in 2010, the data show.Attractive ValuationsThe stock rally has driven the gauge to trade at 8 times estimated earnings, the most expensive level in almost two years, according to data compiled by Bloomberg. The last time the gauge traded at this level -- in June 2011 -- the measure slumped more than 10 percent in two months. The current valuation is still 44 percent below the MSCI Asia-Pacific Index’s 14.2 multiple.“Valuations are still attractive,” Muhammad Imran, who oversees about $203 million as chief investment officer at ABL Asset Management Co. in Karachi. “People will take this election positively. Foreign inflows have been driving the market and this will continue.”Seven stocks advanced in the KSE 100 today for each one that declines. MCB Bank Ltd., the country’s largest by market value, gained 4.9 percent to 261.60 rupees, poised for the highest close since May 2008. Pakistan State Oil Co. jumped 5 percent to 221.86 rupees....

Here's a Reuters' report on Templeton and Goldman Sachs bullishness on Pakistan:

After 18 years as a banker at firms such as Citigroup and Nomura, Shaheryar Chishty took a different direction in late 2011, starting an investment firm that, among other things, helped guide Chinese and South Korean money into Pakistan.

While Pakistan is probably not the first place the average investor would choose to park cash, Chishty's timing was spot on. The country's stock market surged 49 percent last year to become one of the five best performing markets in the world.

The victory by former prime minister Nawaz Sharif in Pakistan's general election lifted the stock market to an all-time high on Monday, in a sign that investors, which include Goldman Sachs (GS.N) and Mark Mobius of Templeton, are betting on the prospect of further market gains through a stable government.

"I'm not under-estimating the challenges, but we have one party with a simple majority," Chishty, the Pakistan-origin chief executive of Asiapak Investments Ltd, told Reuters in an interview in Hong Kong on Monday. "A lot of the market's rise happened despite the previous government."

Risks, especially violence by Islamic militant groups, remain constant, yet Pakistan's market is up another 21 percent this year, behind only Japan and the Philippines as Asia's top gainers, according to Thomson Reuters data.

Pakistan's uncertain security environment and a deteriorating economy have failed to keep emerging market fund guru Mobius and Goldman Sachs Asset Management out of the country.

Mobius invested 4.6 percent of his $18.5 billion Templeton Asian Growth Fund's assets in Pakistani shares as of the end of March, more than his exposure to shares in Hong Kong, Singapore or Taiwan, according to data from Thomson Reuters Lipper.

"Pakistan is not a small country and it is strategically significant. However, with the negative press surrounding the country, it has tended to be ignored by investors," said Mobius, executive chairman of Templeton Emerging Markets Group.

Last year, 15 equity funds from Pakistan were among the world's top 100 performers, the Thomson Reuters Lipper data show....

If the best time to buy, as the old business adage says, is when there is blood on the streets, then Pakistan’s commercial capital, Karachi, offers the ideal investment opportunity.

For more than a decade, the sprawling seaport megalopolis of about 20 million people has been racked by political, militant and criminal violence that has taken thousands of lives. Yet, over the same period, the city stock market, which is also Pakistan’s main exchange, has posted spectacular results.

Over the past 12 months alone, the Karachi Stock Exchange has surged more than 44 percent, placing it among the world’s top-performing stock markets in dollar terms this year, according to Bloomberg.

That follows a decade of growth in which one dollar invested in an index fund of Pakistani stocks 10 years ago would have earned, on average, 26 percent every year, analysts say, in a period otherwise notable mostly for bad news. As the stock market rose, the Pakistani military leader Gen. Pervez Musharraf fell, Osama bin Laden was captured and Taliban violence spread from the northwest to cities across the country, including Karachi.

Just as surprising, perhaps, Wall Street firms are driving the latest phase of the stock boom. Bad news can make for a good bargain, they say.

“What you see in the popular press is just one part of the picture,” said Mark Mobius, a fund manager at Franklin Templeton Investments, which has more than $1 billion invested in Pakistan stocks, mostly in the energy sector. “There’s another side to these countries, where life goes on. And that’s what we focus on.”

The gloomy image of Pakistan obscures positive aspects of its economy that, investors say, make some companies an attractive bet. Beyond the headline news, much of the country is getting on with normal life. And with a population estimated at nearly 200 million people — a high proportion of them young — Pakistan offers a large, lucrative market for consumer goods, construction and financial services firms, which constitute the bulk of the Karachi stock market.

The biggest publicly listed companies — like the multinational Nestlé, the Oil and Gas Development Company and Fauji Fertilizer, a military-run conglomerate — pay handsome dividends, which makes them attractive to foreign investors.

And the recent election victory of Prime Minister Nawaz Sharif, a business tycoon, has injected confidence into the financial community, which had been wary of the previous government.

For a time, Pakistani stocks were undervalued by as much as 50 percent to account for risk, compared with a regional discount of about 20 percent, said Taha Javed, a financial analyst in Karachi. Now, as foreign investors pile in, he said, “we are catching up.”...

Shadow Economies All over the WorldNew Estimates for 162 Countries from 1999 to 2007Friedrich SchneiderAndreas BuehnClaudio E. Montenegro

Pakistan's shadow economy estimated at 36%

Activities associated with shadow economies are facts of life around the world. Most societiesattempt to control these activities through various measures such as punishment, prosecution,economic growth or education. To more effectively and efficiently allocate resources, it iscrucial for a country to gather information about the extent of the shadow economy, itsmagnitude, who is engaged in underground activities, and the frequency of these activities.Unfortunately, it is very difficult to get accurate information about shadow economyactivities, including the goods and labor involved, because individuals engaged in theseactivities do not wish to be identified. Hence, doing research in this area can be considered ascientific passion for “knowing the unknown.”Although substantial literature5exists on single aspects of the hidden or shadow economy andcomprehensive surveys have been written by Schneider and Enste (2000), and Feld andSchneider (2009), the subject is still quite controversial as there are disagreements about thedefinition of shadow economy activities, estimation procedures utilized, and the use of theirestimates in economic and policy analysis.6Nevertheless, there are some indications that theshadow economy has grown around the world, but little is known about the development andthe size of the shadow economies in developing Eastern European and Central Asian (mostlyformer transition) countries, and high income OECD countries over the period 1999 to2006/2007. The period was chosen as it has the most comprehensive data availability. Thisstudy is an attempt to fill this gap by using the same estimation technique and almost the samedata sample used in Schneider and Buehn (2009) and Schneider and Enste (2000).Therefore, the goal of this paper is twofold: (i) to undertake the challenging task of estimatingthe shadow economy for 162 countries in various stages of development and located inseveral regions throughout the world7and (ii) to provide some insights about the main causesof the shadow economy. To our knowledge, such an attempt has not been undertaken so far;hence, we provide a unique database of the size and trends of the shadow economy in 162countries over the period 1999 to 2006/2007. This is an improvement compared to previouswork – we used the MIMIC (Multiple Indicators Multiple Causes) estimation method for allcountries, thus creating a unique data set that allows us to compare shadow economy data.

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San Francisco based Cloudcade has announced it will invest $6 million to set up a game development studio in Lahore, Pakistan, according to Venturebeat.

The Lahore studio will be led by Ammar Zaeem, cofounder of Pakistan’s mobile game studio Caramel Tech which already has a team of 50 engineers.
The move is a big investment into Pakistan as a tech hub, and it shows how the game business is expanding around the globe.

Cloudcade:

Founded by Di Huang in 2013, Cloudcade is known for its popular multiplayer game "Shop Heroes" that pits players against each other in a competition to create the best shop they can. If a player can make a better store and perform more tasks than his or her rivals, he or she wins.

The game is available on the Apple iOS App Store, Google Play, Samsung Galaxy Store, Amazon, Kongregate, and Facebook. It is now also supported on the Apple Watch.

43.5% of Indians, the highest percentage in the world, say they do not want to have a neighbor of a different race, according to a Washington Post report based on World's Values Survey.

About Pakistan, the report says that "although the country has a number of factors that coincide with racial intolerance – sectarian violence, its location in the least-tolerant region of the world, low economic and human development indices – only 6.5 percent of Pakistanis objected to a neighbor of a different race. This would appear to suggest Pakistanis are more racially tolerant than even the Germans or the Dutch".

Housing Discrimination:

It appears that there is a small but militant minority in Pakistan that is highly intolerant, but the vast majority of people are tolerant. My own experience as a former Karachi-ite is that there is little or no race or religion based housing segregation, the kind that is rampant in India where Muslims are not welcome in most Hindu-dominated neigh…

The development of JF-17, a modern highly capable and relatively inexpensive fighter jet, is the crowning achievement to-date of the Pakistan-China defense production cooperation. It's being deployed by Pakistan Air Force with Pakistan Aeronautical Complex (PAC). The latest version is capable of launching a variety of nuclear and conventional weapons ranging from smart bombs and air-launched cruise missile Raad to anti-ship missiles.

I am the Founder and President of PakAlumni Worldwide, a global social network for Pakistanis, South Asians and their friends. I also served as Chairman of the NEDians Convention 2007. In addition to being a South Asia watcher, an investor, business consultant and avid follower of the world financial markets, I have more than 25 years experience in the hi-tech industry. I have been on the faculties of Rutgers University and NED Engineering University and cofounded two high-tech startups, Cautella, Inc. and DynArray Corp and managed multi-million dollar P&Ls. I am a pioneer of the PC and mobile businesses and I have held senior management positions in hardware and software development of Intel’s microprocessor product line from 8086 to Pentium processors. My experience includes senior roles in marketing, engineering and business management. I was recognized as “Person of the Year” by PC Magazine for my contribution to 80386 program. I have an MS degree in Electrical engineering from the New Jersey Institute of Technology.
www.pakalumni.com
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